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Alaska Airlines mechanics approved a new four-year labor contract yesterday, three months after rejecting an initial agreement between the company and union negotiators.

The pact is a generous one, particularly in light of the wage cuts and layoffs that mechanics have endured at bankrupt airlines such as Northwest, Delta and United.

Indeed, mechanics at Northwest have been on strike since Aug. 20 over the airline’s desire to cut more than 2,000 jobs and slash mechanics’ pay by 25 percent.

The 700 Alaska mechanics will receive an immediate 11.78 percent raise, a $1,000 signing bonus and a cap on medical costs that will limit employees’ share of their medical expenses to 20 percent with Alaska paying the remaining 80 percent.

Union members will also get a 1 ½ percent raise on each anniversary of the contract signing, but the yearly pay increase could go higher still; it is subject to annual review by the union and the company, and if data indicates that pay for Alaska mechanics is falling behind industry averages, the union can ask for more.

“When you weigh this [contract] against the backdrop of what’s happening in the rest of the airline industry … this is a very good agreement,” said Louie Key, regional director for the Aircraft Mechanics Fraternal Association and one of the union’s principal negotiators.

The union’s rank-and-file agreed. Of the 565 mechanics who cast ballots, 88 percent voted to ratify the offer.

“Line maintenance is a core function of Alaska Airlines,” Alaska Chief Executive Bill Ayer said in an internal message to employees. “This new contract recognizes that fact and will provide these dedicated employees with market-based wages for years to come.”

The previous proposal was endorsed by just 36 percent of the members who voted.

A big reason for the opposition to the earlier agreement was concern about medical costs, Key said.

Mechanics were particularly unhappy that their was no cap on medical costs in 2009, the final year of the contract.

Union members had also chafed at proposed changes to work rules, such as Alaska’s desire to use subjective performance measures, rather than seniority, to appoint lead mechanics. Alaska also wanted to eliminate a rule mandating a 30-minute paid lunch break after each four hours of overtime worked.

“It’s only 30 minutes, but it had a large emotional value attached to it,” Key said.

This is not the end of Alaska’s labor concerns. Most notably, Alaska is working through the National Mediation Board to try to forge a contract with its 2,500 flight attendants, who rejected a tentative agreement on a new five-year deal July 19.

Earlier this year Alaska cut 472 baggage handlers after outsourcing the work to a third-party, and a mediator imposed a 26 percent pay cut on Alaska pilots after the company and the pilots’ union failed to negotiate a new contract.

Alaska is due to report its third-quarter results Thursday. Investment analysts are forecasting the company will report profits of $2.04 per share, or about $55 million.